Credit downgrading should not prevent cuts

Following the downgrading of the UK's credit rating by Moody's rating agency, Stephen Davies discussed the issue on BBC Radio Kent and how this will effect Government spending cuts.

"It's very imporant that we do actually go on with the programme of getting public spending under control. The point to realise is that so far the government hasn't done that. 85 per cent of the cuts that George Osborne outlined in his first budget haven't taken place yet," argued Dr Davies.

"Public spending is in fact higher now than it was when the government came into office. The cuts that we have had have been the wrong kind because they've been cuts to capital expenditure which might actually do some good."

Dr Davies stated that the government should be cutting current spending such as government transfers and salaries which it has not yet done. The government has actually cut capital expenditure and increased VAT which Dr Davies states is possibly the worst thing that could be done.

"We need a significant reform of public spending. We also need a lot of supply-side reform like changes to planning laws for example which would address the acute shortage of housing we have in this country which is actually one of our major economic problems," argued Dr Davies.